Taxes and income and more

[trent2275]

What is the name of your state? NY

This is related to another post I made about trademarks. I need to have a friend of mine setup a PayPal account in his name so that I can sell advertising space on a new website project.

My friend is getting a percentage of all money made to keep for himself. While I am getting the other, much larger percentage. Everything is in his name.

What is the best way to do this in regards to taxes? Should he pay me as a contractor? Should he just pay the taxes on all of it and give me my cut, and I pay taxes on my share?

I have no idea what way this should be done. He wants to do it by the books, as do I.

 

[LdiJ]

What is the name of your state? NY

This is related to another post I made about trademarks. I need to have a friend of mine setup a PayPal account in his name so that I can sell advertising space on a new website project.

My friend is getting a percentage of all money made to keep for himself. While I am getting the other, much larger percentage. Everything is in his name.

What is the best way to do this in regards to taxes? Should he pay me as a contractor? Should he just pay the taxes on all of it and give me my cut, and I pay taxes on my share?

I have no idea what way this should be done. He wants to do it by the books, as do I.

If you want to do it by the books, then do it in your own name. Otherwise, he should pay you as a contractor and issue you a 1099 for your share of the money.

 

[trent2275]

Yeah my friend has to do it, I am not able to get a PayPal account.

 

[abezon]

The complicated way: He declares the full amount of income (advertising fees + PayPal interest) on his return. He 'nominees' your share of the interest to you by filing a 1099-INT in January. He also issues you a 1099-MISC for your share of the advertising fees. You have contract drawn up to cement the percentages. You pray he doesn't run off with the money.

The easier way: Form a partnership & have the partnership get the PayPal account. The partnership files a tax return under its own tax ID number & reports net income & interest to the partners. Write up a partnership agreement.